The formula to calculate the Buyout Price (BP) is:
\[ BP = RV + RP \]
Where:
The Buyout Price is the total amount required to purchase an item, such as a leased vehicle, at the end of the lease term. It is calculated by summing the residual value of the item (the expected value of the item at the end of the lease term) and the total remaining payments owed on the lease.
Let's assume the following values:
Using the formula to calculate the Buyout Price (BP):
\[ BP = RV + RP = 10000 + 5000 = 15000 \]
The Buyout Price (BP) is \$15,000.